Trevor Little

Last week, World Trademark Review hosted the Managing the Trademark Asset Lifecycle (MTAL) conference in New York. With a diverse mix of attendees, including corporate trademark counsel, private practitioners, brand consultants, financial market specialists and valuation specialists, the day was an illuminating one. We used the flight back to World Trademark Review HQ in London to reflect on some of the issues discussed and present some of the highlights.

The battle to be appreciated – For our opening Q&A we explored the tactics that can be employed to increase the profile of the trademark function amongst other corporate stakeholders. Sometimes this means getting more involved creatively, taking the time to come up with alternatives when product names may be difficult to clear (Judy McCool, senior vice president, legal affairs, Home Box Office, declared that the legal team “has to be part ninja, part magician, and find a solution. We can’t always say yes but we never say no”.). In other instances it is all about fostering a sense of collegiality and letting colleagues know that you are on their side. In all cases, though, Pamela Weinstock, associate general counsel of Kenneth Cole, stressed that “legalese” should not be spoken outside the legal department. Turning to the specific messages that should be conveyed to colleagues in financial roles, the panellists felt that these should focus on benchmarking and metrics that show the value the in-house trademark function creates for (as well as how much money it saves) the company. One suggested approach was the creation of a single-page fact sheet that profiles the trademark function, explains how it supports the business and highlights some of these key financial metrics. Of course, all of this is predicated on the fact that the burden of outreach falls squarely on the shoulders of the trademark team but, as Shelley Jones, senior legal counsel, trademarks and brand enforcement at BlackBerry, concluded: “Taking time to build internal relationships really pays off further down the line.” Reflecting on this session it is very clear that the best-in-class trademark counsel are proactive, creative and comfortable talking business language.

Exploit the work of others for your own purposes – The value of the brand that the trademark function supports can be a powerful component of the aforementioned fact-sheet – as Jones noted, “showing the link to the bottom line gets attention”. The reality, though, is that few counsel have the resources required to green-light a full-scale brand valuation on the basis that it would help senior management and internal colleagues understand the importance of their work. However, as the panellists explained, there are ways to conduct smaller scale or informal valuations. Additionally, the ranking tables published by valuation service providers can prove a useful resource, Patrick Flaherty, intellectual property and internet law attorney at Verizon Communications, explained: “The brand has tremendous value to us and, while it doesn’t impact our transactional work, we certainly keep track of third-party valuations and awards for internal reporting purposes.” For the companies that appear on such tables, this type of recognition allows an important message to be conveyed to internal stakeholders – that trademark maintenance and protection is not just a company cost, but is directly contributing to brand value.

A new revenue stream for law firms? – It was clear from the above discussion that corporate counsel would see real benefits from regularly undertaking brand valuations, yet the cost of doing so can be prohibitive, meaning that these are often undertaken only when necessary for transactions. It may therefore seem an odd suggestion that brand valuation services could prove a lucrative revenue stream for law firms. However, Etienne Sanz de Acedo, CEO of the International Trademark Association, argued (some would say boldly given the presence of professional brand valuation service providers in the room) that firms could be well-placed to offer such services. The feeling amongst attendees was that, in an ideal world, brand valuations would be undertaken on an annual basis. We are far from that position at the moment, but it may not be far away. David Haigh, CEO of Brand Finance, reported that in China it is a legal requirement that the largest companies conduct a valuation each year. The standards being set in China could eventually be adopted as international corporate best practice. Should that be the case, and brand valuation becomes a serious management discipline, then canny law firms may well come to view related services as a key revenue generator.

Plain packaging for toys? It’s not as far-fetched as it sounds – One trademark issue that hasn’t caught the attention of senior management in (currently) non-impacted sectors is the spectre of plain packaging. To date, as we have reported extensively on the World Trademark Review blog, it is the tobacco industry that has been hit hardest. The message from trademark associations has been clear, though: ‘It’s tobacco today, it could be sugary drinks, confectionary products, fast food or alcohol next’. Could it spread even further? It is certainly being discussed in political circles. Sanz de Acedo recounted a conversation he had with government officials in a particular jurisdiction, in which he was told that INTA should be “pleased” that the country was only looking to implement plain packaging for tobacco products, as they had had serious discussions about extending the regime to toys (one rationale being that the presence of branding encourages children to pressure parents to make a purchase). Clearly, the risk of plain packaging creep is one that looms large. And by the time senior management in soon-to-be-affected sectors get the message, it may be too late.

Tax authorities just don’t ‘get’ trademarks – “When the sexy worlds of trademarks and tax collide, it can be so much fun.” So said Ainslee A Schreiber, vice president and associate general counsel, Starwood Hotels & Resorts Worldwide, with tongue firmly in cheek. Perhaps it isn’t a sexy coupling but it is an important one and trademark counsel face a number of challenges when managing tax and holdings related issues - not least keeping track of the changing tax legislation landscape. Haigh has observed a clear shift in approach amongst authorities as they bid to maximise the revenue that fall within their jurisdiction so they can tax it. This creates a complex environment in which to reorganise IP ownership structures. It is compounded somewhat by misperceptions about IP on the part of tax authorities. Haigh recounted: “I have to say that, worldwide, tax authorities have been weak in their understanding of IP. It is getting better but remains pretty hopeless. I recently had a UK revenues and customs official visit our offices and he had no real understanding of trademarks. For instance, he was adamant that VIRGIN should not be a registered trademark - because it is a descriptive term!” Reflecting on the session, one attendee tweeted: “Who would have guessed that the tax part of the day would be so fascinating?” Perhaps not a sexy collision, then, but it certainly isn’t as dull a topic as it may first appear.

Preparing for the licensing dance – When licensing IP rights, the canny management of audit provisions is paramount. Yet it is often a cause of conflict, as Oliver Herzfeld, senior vice president and chief legal officer at Beanstalk, explained: “The licensing system is ultimately based on the honour system – the licensee has to self-report on what is being sold and the licensor has to accept that, unless they get proactive. The audit provision is therefore a bit of a dance - licensees don’t want to be audited but the rights owner says ‘you have to have an audit’. They then say ‘well you should pay for the audit then’. So you pay for the audit. But what happens if you subsequently discover that they have underpaid?” The answer? “You could add a provision that says that, if they under-report in a particular quarter, then they have to pay for the audit – under-reporting then acts as the tripwire. And perhaps you require that they then have to pay for a follow-up audit. There are all sorts of bells and whistles you can negotiate.” It is a complicated dance and one in which missteps could be very costly.

And finally, a thank you – The event was designed to be an interactive forum in which best practice and practical strategies for the management of trademarks and brands could be shared and debated. This would not have been possible without those in attendance participating fully in the discussions. We would therefore like to give a big thank you to all of the event’s delegates, as well as the speakers and sponsors. We hope that you will join us again next year.


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